Ex-Redflex figure Martin O'Malley pleads guilty, faces up to five years in prison in red light camera case.

The bribe was paid over lunch at Schaller's Pump, a Bridgeport neighborhood institution and political stronghold across the street from the 11th Ward Democratic headquarters.

The amount was disguised in a coded message:

"8 page speed overview can be discussed at lunch as your schedule permits," John Bills, then a top transportation official at City Hall, emailed to his friend, Martin O'Malley, the day before their June 2011 meeting.

The $8,000 cash O'Malley brought to Schaller's was one of the last payments in an alleged $2 million kickback scheme to steer the city's lucrative red light camera contracts to Redflex Traffic Systems Inc., federal prosecutors allege.

On Wednesday, O'Malley, Redflex's former Chicago-based consultant, pleaded guilty to a single count of conspiracy to bribe a public official, admitting he acted as the bagman to grease kickbacks to Bills to keep the contracts flowing for Redflex.

The guilty plea marked the first conviction in a sweeping scandal that by size alone ranks among the largest in Chicago's notorious history of corruption. The Tribune first disclosed the questionable relationship between Bills and Redflex in the fall of 2012 after obtaining a 2-year-old internal whistleblower memo written by an ousted Redflex vice president.

O'Malley, 73, faces up to five years in prison, but his sentence could be far less because of his cooperation with law enforcement and his poor health.

In a soft but firm voice, O'Malley told U.S. District Judge Virginia Kendall that he's diabetic, has a pacemaker and takes 16 daily medications for various ailments. When the judge asked him if he felt well enough to proceed, O'Malley shrugged, spread his hands and said, "As good as can be."

His sentencing was postponed until after he is finished cooperating against the other defendants in the case. Another former Redflex executive, Aaron Rosenberg, was also cooperating under an immunity agreement, the Tribune reported in August.

O'Malley, of south suburban Worth, was indicted in August along with former Redflex CEO Karen Finley and Bills, the city's former managing deputy commissioner of transportation, who is accused of taking hundreds of thousands of dollars in cash, vacation trips and personal gifts to rig the contract. Bills and Finley have pleaded not guilty and denied any wrongdoing.

Antonio Perez, Chicago Tribune

Martin O’Malley, former Chicago-based consultant for Redflex Traffic Systems Inc., leaves the Dirksen U.S. Courthouse in Chicago on Sept. 2 after his arraignment.

According to the charges, O'Malley was hired by Redflex after Bills told him to answer an advertisement placed by Finley in 2003 looking for a Chicago consultant. Prosecutors say the arrangement was intended as a conduit to funnel bribe payments to Bills.

O'Malley admitted in a 22-page plea agreement with prosecutors that he knew before he signed his contract with Redflex that large portions of his compensation from the company — a $60,000 salary and hundreds of thousands of dollars in commissions and bonuses — would be illegally funneled to Bills.

Bills told O'Malley that sharing the commissions was "the way business is done," according to the plea agreement. At first, the two agreed to split the commissions half and half, but in reality Bills kept almost all of the money. O'Malley even had to pay the taxes on the commissions because they counted as his earnings, the plea agreement said.

In all, O'Malley gave Bills $570,000 in cash from 2004 to 2012, in addition to paying for some of Bills' personal debts and even buying a Gilbert, Ariz., condominium for Bills' use, prosecutors alleged. In addition, Redflex paid for hotel rooms, car rentals, meals, golf games, computers and other personal items for Bills.

O'Malley also wrote checks to cover Bills' retirement party from the city as well as to an undisclosed "political organization," according to his plea agreement. O'Malley then included those costs on his expense reports, which Redflex reimbursed, the plea agreement said.

To conceal the scheme, O'Malley had Redflex send his commission checks to a post office box he had set up at a shipping store in the Morgan Park neighborhood, according to the plea agreement. When he received a check, O'Malley would arrange to meet Bills for lunch at Chicago-area restaurants. Bills often arrived in his city-issued vehicle, prosecutors said.

Under Bills' guidance, Redflex's Chicago program grew into a marquee system for the Australia-based company — its largest in the United States — and generated more than $500 million in $100 tickets for the cash-starved city.